DTCC’s Tokenization Pilot Identifies Brokerage Portfolio Applications

DTCC has announced a partnership with Chainlink for a tokenization pilot called Smart NAV. The tokenization capabilities can power numerous downstream use cases such as brokerage portfolio applications, real-time automated data dissemination, and built-in access to historical data. This is part of DTCC’s ongoing exploration of digital assets and their application in financial services.

DTCC identifies an opportunity for on-chain price and rate data that can serve as a key enabler to the exploration of new initiatives, amid increased industry attention on mutual fund tokenization. A ‘chain-agnostic’ approach is key to enabling other use cases to build atop Smart NAV’s foundations.

Brokerage Portfolio Applications, Data Dissemination, Historical Data

Smart NAV was designed to explore an extension of a DTCC service, Mutual Fund Profile Service I (MFPS I), the industry standard for transmitting “Price and Rate” data, also known as “NAV data”. Both firms worked together to evaluate the feasibility and industry value of delivering a DLT-based price and rate dissemination solution that can enable new benefits and support experimentation in the asset management space.

According to the announcement, the pilot found that by delivering structured data on-chain and creating standard roles and processes, foundational data could be embedded into a multitude of on-chain use cases, such as tokenized funds and “bulk consumer” smart contracts, which are contracts that hold data for multiple funds.

This capability can support future industry exploration and can power numerous downstream use cases as well, such as brokerage portfolio applications. Additional benefits include real-time, more automated data dissemination and built-in access to historical data.

DTCC Wants to Expand the Scope of the Pilot

Smart NAV centers around providing the capability to make trusted, verifiable data available on virtually any blockchain network(s) to support the use of that data in business workflows. DTCC served as the provider, or sourcer, of that data, as well as the governor of the on-chain solution that stores that data, while Chainlink’s CCIP served as the interoperability layer.

The core capability explored is applicable across endless use cases that could ultimately power more streamlined and efficient operational processes. Based on these findings, DTCC wants to expand the scope of the pilot to explore how the technical capability leveraged in the pilot could power a broader range of use cases beyond the dissemination of price and rate data and across a greater number of blockchains.

Conclusion

The DTCC and Chainlink partnership for the Smart NAV tokenization pilot has revealed the potential for blockchain technology to revolutionize the financial services industry. With the ability to power numerous downstream use cases, including brokerage portfolio applications, the pilot has shown that a chain-agnostic approach can provide real-time, automated data dissemination and built-in access to historical data. The success of the pilot has led to DTCC’s desire to expand its scope, exploring the potential for the technology to power a broader range of use cases across a greater number of blockchains.